Adobe (ADBE) Positioned for Success as AI-Enhanced Creativity Flourishes

By Don Francis, Editor
September 16, 2023 12:54 PM UTC
Adobe (ADBE) Positioned for Success as AI-Enhanced Creativity Flourishes

Mizuho's Gregg Moskowitz reiterated their Strong Buy rating on Adobe (NASDAQ: ADBE). The analyst also maintained a $630 price target. Moskowitz's positive outlook on the company comes after Adobe delivered strong Q3 2023 results, exceeding expectations in key areas.

In Q3 2023, Adobe reported earnings per share (EPS) of $4.09, beating the Zacks Consensus Estimate of $3.97 and showing a significant increase of 20.3% compared to Q3 2022's EPS of $3.40. The company's revenues for the quarter reached $4.89 billion, in line with the Zacks Consensus Estimate and representing a 10.4% increase over Q3 2022's $4.43 billion.

Moskowitz highlighted Adobe's net new Digital Media Annual Recurring Revenue (ARR) of $464 million, which exceeded expectations. The analyst believes that Adobe is well-positioned to benefit from the ongoing digital transformation, making it an attractive investment opportunity.

Looking ahead to Q4 2023, Adobe's management has provided guidance of an EPS range between $4.10 and $4.15, with anticipated revenues between $4.98 billion and $5.03 billion. CEO Shantanu Narayen expressed enthusiasm for the company's future, stating, "We are unleashing a new era of AI-enhanced creativity around the world with innovations across our product portfolio."

In addition to Moskowitz's rating, other analysts also updated their outlook on Adobe on September 15, 2023. Citigroup's Tyler Radke raised their price target by 7% to $570 and maintained a Hold rating on the stock. Baird's Rob Oliver raised their price target by 8% to $500 and also maintained a Hold rating. Barclays's Saket Kalia raised their price target by 3.2% to $620 and held a Hold rating as well.

Currently, 66.7% of top-rated analysts rate ADBE as a Strong Buy or Buy, while 33.3% view it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts predicts that ADBE's upcoming year will deliver an EPS of $12.87. If these predictions hold true, it would represent a 22.5% increase on a year-over-year basis.

Since the release of Adobe's Q3 2023 report on September 14, 2023, the stock price has experienced a decline of 4.2%. However, on a year-over-year basis, the stock has seen an impressive increase of 71.1%, outpacing the broader market as the S&P 500 rose by 14.1%.

It is worth noting that Mizuho analyst Gregg Moskowitz is ranked in the top 11% of Wall Street analysts by WallStreetZen, with an average return of 3.3% and a win rate of 50.7%. Moskowitz specializes in the Technology sector.

Adobe Inc., a diversified software company, operates worldwide through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products and services that enable individuals, teams, and enterprises to create, publish, and promote content, including its flagship product, Creative Cloud. The Digital Experience segment provides a platform and applications for brands and businesses to manage customer experiences. The Publishing and Advertising segment offers various products and services, such as e-learning solutions and web conferencing. Adobe distributes its products and services through various channels, including its sales force, app stores, and website.

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